Iteration Energy Ltd. Announces 81% Reserve Increase



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION
    IN THE UNITED STATES/

    CALGARY, March 3 /CNW/ - Iteration Energy Ltd. ("Iteration") (TSX: ITX)
is pleased to report selected information from Iteration's reserve report
dated effective December 31, 2007 and provide additional operational
information.

    
    Key Highlights
    --------------
    Iteration is pleased to present the following summary of highlights from
the McDaniel and Associates Consultants Ltd. reserves report dated effective
December 31, 2007 and selected operational information, as compared to
December 31, 2006 (the"McDaniel Report").

    -   An 81% increase in total proved reserves to 12.7 mmboe.
    -   A 75 % increase in total proved plus probable reserves to 19.1 mmboe.
    -   A 50 % increase in annual average production to 6,620 boed.
    -   A 36 % increase in exit production to 8,250 boed.
    -   Estimated capital spending of $144.3 million resulted in replacing
        production of 2.4 mmboe by a factor of 4.4 times on a proved plus
        probable basis.
    -   Finding, development and acquisition costs for proved plus probable
        reserves of $15.45/boe including change in future capital.
    -   An increase of 36% in proved plus probable reserves per debt adjusted
        share.
    -   An increase in proved plus probable reserve life index from 4.6 to
        5.6 years.
    -   An increase in oil and natural gas liquids content of the proved plus
        probable reserves from 6% at year-end 2006 to 38% at year-end 2007.

    Summary Reserves and Operational Information
    --------------------------------------------
    The following table provides a summary of certain sections (forecast
prices and costs) of the McDaniel Report and also certain operational and
financial information of Iteration. Note that the operational and financial
information of Iteration as at December 31, 2007 are estimates only.

                                                                    % Change
                                       December 31, December 31,   from 2006
                                              2007         2006      to 2007
                                       ------------ ------------ ------------
    Total proved reserves (mboe)            12,654        6,982           81
    Proved plus probable reserves (mboe)    19,064       10,894           75
    NPV10 proved plus probable reserves
     ($Million)(1)                             345          208           66
    Estimated annual average production
     (boed)(2)                               6,620        4,420           50
    Estimated exit production (boed)         8,250        6,050           36
    Estimated capital expenditures
     ($Million)(2)                             144          114           27
    Proved plus probable finding and
     development costs without future
     capital ($/boe)                         12.49        15.00          (17)
    Proved plus probable finding and
     development costs with future
     capital ($/boe)                         15.22        18.39          (17)
    Proved plus probable finding,
     development and acquisition costs
     with future capital ($/boe)             15.45        19.92          (22)
    Proved plus probable reserves per
     thousand debt adjusted shares (boe/
    thousand shares)                           205          151           36

    Notes:
    (1) NPV10 means the net present value discounted at 10%. Calculations are
        before tax and based on forecast prices and costs as at January 1,
        2008 by McDaniel and Associates Consultants Ltd. The price forecast
        can be viewed on their website at www.mcdan.com
    (2) Iteration's audited financial statements for the year ended
        December 31, 2007 will be finalized and filed on SEDAR
        (www.sedar.com) prior to March 31, 2008.


    The reserve information for the year ended December 31, 2007 is a summary
of information to be included in the Statement of Reserves and Other Oil and
Gas Information of Iteration for the year ended December 31, 2007, which will
be prepared in accordance with National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities and will be included in Iteration's
annual information form for the year ended December 31, 2007, a copy of which
will be filed on SEDAR (www.sedar.com) and on Iteration's website
(www.iterationenergy.com).

    -------------------------------------------------------------------------
    2007 Finding &
     Development                                           Proved
     Costs ("F&D")                  Proved                   Plus     Proved
     and Finding,        Capital   Reserve               Probable       Plus
     Development &      Expendit-      Add-     Proved    Reserve   Probable
     Net Acquisition     ures ($    itions       Costs  Additions      Costs
     ("FD&A") Costs    thousands)     mboe)    ($/boe)      (mboe)    ($/boe)
    -------------------------------------------------------------------------
    F&D exploration and
     development program
     before revisions     88,580      3,898      22.73      6,318      14.02
    -------------------------------------------------------------------------
    F&D exploration and
     development program
     after revisions(a)   88,580      5,655      15.66      7,095      12.49
    -------------------------------------------------------------------------
    Change in proved
     future development
     capital(b)           18,640        n/a        n/a        n/a        n/a
    -------------------------------------------------------------------------
    Change in proved
     plus probable
     future development
     capital(c)           19,400        n/a        n/a        n/a        n/a
    -------------------------------------------------------------------------
    Proved F&D including
     change in future
     development capital
     (d) equals (a+b)    107,220      5,655      18.96        n/a        n/a
    -------------------------------------------------------------------------
    Proved plus prob-
     able F&D including
     change in future
     development capital
     (e) equals (a+c)    107,980        n/a        n/a      7,095      15.22
    -------------------------------------------------------------------------
    Net acquisition/
     disposition
     activity(f)          55,670      2,440      22.81      3,499      15.91
    -------------------------------------------------------------------------
    Total 2007 proved
     FD&A costs including
     future development
     capital(d+f)        162,890      8,095      20.12        n/a        n/a
    -------------------------------------------------------------------------
    Total 2007 proved
     plus probable FD&A
     costs including
     future development
     capital(e+f)        163,650        n/a        n/a     10,594      15.45
    -------------------------------------------------------------------------



                          Summary of Gross Reserves
                         (forecast prices and costs)

                                                    December 31, December 31,
                                                           2007         2006
                                                    ------------ ------------
    Proved reserves
      Light and medium oil (mbbls)                        2,894           86
      Heavy oil (mbbls)                                     697          160
      Gas (mmcf)                                         46,606       39,324
      Natural gas liquids (mbbls)                         1,281          182
      Sulphur (mlt)                                          15            0
      BOE(1) (mboe)                                      12,654        6,982
    Proved plus probable reserves
      Light and medium oil (mbbls)                        4,301          161
      Heavy oil (mbbls)                                   1,015          257
      Gas (mmcf)                                         71,160       61,267
      Natural gas liquids (mbbls)                         1,865          265
      Sulphur (mlt)                                          24            0
      BOE(1) (mboe)                                      19,064       10,894

    Note:
    (1) "BOE" means barrel of oil equivalent on the basis of 1 boe to 6,000
        cubic feet of natural gas. BOE's may be misleading, particularly if
        used in isolation. A BOE conversion ratio of 1 boe for 6,000 cubic
        feet of natural gas is based on an energy equivalency conversion
        method primarily applicable at the burner tip and does not represent
        a value equivalency at the wellhead. A BOE conversion ratio of 1 boe
        for lt of Sulphur is used.



                       Summary of Oil and Gas Reserves
                           As of December 31, 2007
                         (forecast prices and costs)

    -------------------------------------------------------------------------
                     Light and medium
                           oil                Heavy oil         Natural gas
    -------------------------------------------------------------------------
    Reserve             Gross      Net     Gross      Net     Gross      Net
     Category           (mbbl)   (mbbl)    (mbbl)   (mbbl)    (mmcf)   (mmcf)
    -------------------------------------------------------------------------
    Proved
    -------------------------------------------------------------------------
      Developed
       producing      1,679.8  1,551.6     296.6    253.5  39,797.7 31,511.9
    -------------------------------------------------------------------------
      Developed non-
       producing        186.4    167.2         -        -   4,745.9  3,677.9
    -------------------------------------------------------------------------
      Undeveloped     1,028.0    840.6     400.0    344.9   2,062.6  1,437.0
    -------------------------------------------------------------------------
    Total proved      2,894.2  2,559.4     696.6    598.4  46,606.2 36,626.8
    -------------------------------------------------------------------------
    Probable          1,406.8  1,202.3     318.1    273.2  24,553.4 19,286.2
    -------------------------------------------------------------------------
    Total proved
     plus probable    4,301.0  3,761.7   1,014.6    871.6  71,159.7 55,913.0
    -------------------------------------------------------------------------


    ------------------------------------------------------
                                              BOE(1)
                        Natural gas        (including
                          Liquids            sulphur)
    ------------------------------------------------------
    Reserve             Gross      Net     Gross      Net
     Category           (mbbl)   (mbbl)    (mboe)   (mboe)
    ------------------------------------------------------
     Proved
    ------------------------------------------------------
       Developed
        producing     1,124.8    866.5   9,749.1  7,936.0
    ------------------------------------------------------
       Developed non-
        producing        90.8     68.2   1,068.1    848.3
    ------------------------------------------------------
       Undeveloped       64.9     43.9   1,836.7  1,468.9
    ------------------------------------------------------
     Total proved     1,280.5    978.5  12,653.9 10,253.3
    ------------------------------------------------------
     Probable           584.5    447.5   6,410.2  5,144.5
    ------------------------------------------------------
     Total proved
      plus probable   1,865.0  1,426.0  19,064.1 15,397.7
    ------------------------------------------------------

    Note:
    (1) "BOE" means barrel of oil equivalent on the basis of 1 boe to 6,000
        cubic feet of natural gas. BOE's may be misleading, particularly if
        used in isolation. A BOE conversion ratio of 1 boe for 6,000 cubic
        feet of natural gas is based on an energy equivalency conversion
        method primarily applicable at the burner tip and does not represent
        a value equivalency at the wellhead. A BOE conversion ratio of 1 boe
        for lt of Sulphur is used.



                     Net Present Value of Future Revenue
                             Before Income Taxes
                           As at December 31, 2008
                           Discounted at (%/year)
                         (forecast prices and costs)

    -------------------------------------------------------------------------
    Reserve
    Reserve            0           5           10          15          20
     Category        ($M)        ($M)         ($M)        ($M)        ($M)
    -------------------------------------------------------------------------
    Proved
    -------------------------------------------------------------------------
      Developed
       producing   254,521.5   220,677.7   196,294.6   177,688.6   162,934.8
    -------------------------------------------------------------------------
      Developed
       non-produ-
       cing         20,979.4    17,509.0    15,078.5    13,296.8    11,938.6
    -------------------------------------------------------------------------
      Undeveloped   40,857.6    32,742.9    26,585.9    21,827.3    18,081.2
    -------------------------------------------------------------------------
    Total proved   316,358.4   270,929.6   237,959.0   212,812.7   192,954.6
    -------------------------------------------------------------------------
    Probable       185,320.1   136,508.9   107,061.6    87,368.6    73,358.9
    -------------------------------------------------------------------------
    Total proved
     plus probable 501,678.5   407,438.5   345,020.6   300,181.3   266,313.5
    -------------------------------------------------------------------------
    

    Effect of Alberta's proposed New Royalty Framework
    --------------------------------------------------
    On October 25, 2007, the Alberta Government released a report titled "The
New Royalty Framework" ("NRF") containing the government's proposals for
Alberta's new royalty framework, which is scheduled to take effect on
January 1, 2009. Since detailed regulations have yet to be released,
Iteration's initial assessment is that the effect of the NRF would be to
reduce the NPV10 of total proved reserves by 3% and to reduce the NPV10 of
proved plus probable reserves by 4%, based on the McDaniel and Associates
Consultants Ltd. January 1, 2008 forecast prices and costs.

    2007 Drilling Results
    ---------------------
    Iteration was involved in the drilling of 44.5 net wells during 2007
resulting in 33.5 net gas wells, 9.0 net oil wells, and 2 D&A wells, yielding
a success ratio of 96%.

    Q1 2008 Operations Update
    -------------------------
    Iteration has currently drilled 14.5 of its planned 22 net wells pursuant
to its Q1 2008 drilling program, resulting in 12.5 net gas wells, 1 net oil
well, and 1 net injector, yielding a success ratio of 100%. Current production
is approximately 8,100 boed with 1,000 boed completed behind pipe and due on
production this week. Production is therefore expected to exceed 9,000 boed by
early March 2008, with additional wells to be tied-in before the end of the
first quarter.

    Strategic Combination with Cyries Energy Inc.
    ---------------------------------------------
    A joint press release will be issued today by Iteration and Cyries
announcing that they have agreed to certain amendments to the previously
announced arrangement agreement whereby Iteration agreed to acquire all of the
common shares and warrants of Cyries pursuant to an arrangement (the
"Arrangement") under the Business Corporations Act (Alberta). The amendments
relate principally to increasing the consideration payable by Iteration under
the Arrangement.
    The Arrangement is subject to regulatory and court approval and the
approval by a majority of at least two thirds of holders of common shares and
warrants of Cyries, voting as a single class, who vote on the amended
Arrangement at the Cyries securityholders meeting to be held on March 7, 2008.
Assuming all necessary approvals are obtained, it is anticipated that the
amended Arrangement will be completed on March 7, 2007 and in any event no
later than March 11, 2007.
    In addition, Iteration has been advised by Cyries that it will
disseminate a press release today outlining certain production gains from its
Q1 2008 drilling program. While the reserve and operational information
contained in this press release does not contain any information regarding
Cyries, it is expected that the combined company will reach a production rate
in excess of 22,000 boepd before the end of Q1 2008.

    Iteration
    ---------
    Iteration is an Alberta based corporation engaged in the business of
exploring for and developing oil and natural gas reserves in Western Canada
and acquiring natural resource properties. Iteration's common shares are
listed on the Toronto Stock Exchange under the symbol "ITX".

    Advisory Regarding Forward-Looking Statements
    ---------------------------------------------
    This press release contains forward-looking statements and
forward-looking information within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should", "believe",
"plans", "intends" and similar expressions are intended to identify
forward-looking information or statements. More particularly and without
limitation, this press release contains forward looking statements and
information concerning reserves, production, price, operating costs,
operational results and capital expenditures. Statements relating to
"reserves" are deemed to be forward-looking statements, as they involve the
implied assessment, based on certain estimates and assumptions that the
reserves described exist in the quantities predicted or estimated and can
profitably be produced in the future. Forward-looking statements and
information are based on Iteration's current beliefs as well as assumptions
made by and information currently available to Iteration concerning
anticipated financial performance, business prospects, strategies and
regulatory developments. Although management considers these assumptions to be
reasonable based on information currently available to it, they may prove to
be incorrect.
    Since forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are not
limited to, the risks associated with the oil and gas industry in general,
such as operational risks in development, exploration and production delays or
changes in plans with respect to exploration or development projects or
capital expenditures, the uncertainty of reserve estimates, the uncertainty of
estimates and projections relating to reserves, production, costs and
expenses, health, safety and environmental risks, commodity price and exchange
rate fluctuations, marketing and transportation, loss of markets,
environmental risks, competition, incorrect assessment of the value of
acquisitions, failure to realize the anticipated benefits of acquisitions,
ability to access sufficient capital from internal and external sources,
failure to obtain required regulatory and other approvals, and changes in
legislation, including but not limited to tax laws, royalties and
environmental regulations. Accordingly, readers should not place undue
reliance on the forward-looking statements and information contained in this
press release concerning these times. Readers are cautioned that the foregoing
list of factors is not exhaustive.
    Additional information on these and other factors that could affect
Iteration's, operations or financial results are included in Iteration's
Annual Information Form for the year ended December 31, 2006 filed with
applicable securities regulatory authorities and available on the SEDAR
website (www.sedar.com) and on Iteration's website (www.iterationenergy.com).
The forward-looking statements and information contained in this press release
are made as of the date hereof and Iteration undertakes no obligation to
update publicly or revise any forward-looking statements or information,
whether as a result of new information, future events or otherwise, unless so
required by applicable securities laws.

    %SEDAR: 00002576E




For further information:

For further information: Iteration Energy Ltd., Brian L. Illing,
President and Chief Executive Officer, Tel: (403) 290-4867; or Jane
Mactaggart, Vice President Exploitation, Tel: (403) 290-4865; Website:
www.iterationnergy.com

Organization Profile

ITERATION ENERGY LTD.

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